Introduction

There was a time when I couldn’t open my email without feeling anxious. Every notification from the bank, every bill reminder, every “payment due” alert made my heart race. I wasn’t lazy or careless — I was just stuck.

Between credit cards, student loans, and a car payment, I had accumulated more debt than I could comfortably manage. Every month felt like running on a treadmill: I worked hard, made payments, and yet my balance barely moved.

One evening, after realizing I’d paid hundreds in interest that month alone, I finally hit my breaking point. I remember staring at my screen and whispering, “This can’t be my life forever.”

That moment changed everything. It became the start of my debt-free journey — a journey that taught me not only about money, but also about discipline, mindset, and self-worth.

Here’s how I did it — and how you can follow the same 12 steps to get out of debt and finally take control of your financial life.

12 Steps to Get Out of Debt (2026)

Step 1: Face the Numbers (Even If They Scare You)

The first and hardest step was facing the truth. For months, I avoided adding up my total debt because I was terrified of the number.

But denial doesn’t make the problem go away — it only makes it worse.

One Sunday afternoon, I sat down with a notebook, my laptop, and every financial statement I could find. I listed every debt — credit cards, car loan, personal loan, and student loan — along with the interest rates and minimum payments.

When I totaled it up, my stomach dropped. It was over $37,000.

But here’s the thing: that number didn’t defeat me. It motivated me. For the first time, I had clarity. I knew exactly what I was up against — and that meant I could make a plan.

Tip: Always start your debt-free journey by listing your debts, interest rates, and payment schedules. Awareness is power.

Step 2: Stop Using Credit Cold Turkey

I used to justify every swipe of my credit card. “I’ll pay it off later,” I told myself. But “later” never came. The balance just kept climbing.

The truth is, you can’t dig yourself out of a hole if you keep digging. So I took a drastic step: I stopped using my credit cards completely.

I cut up two of them and locked one in a drawer for emergencies only. Then, I switched to using cash and debit cards for all daily spending.

It was uncomfortable at first, but also freeing. For the first time, I was spending real money — not borrowed money. And that shift changed everything.

Tip: The fastest way to get out of debt is to stop adding new debt. Switch to cash or debit to regain control of your spending.

Step 3: Create a Realistic Budget

Before this journey, I thought budgeting was restricting — like a diet for my wallet. But when I finally built a realistic budget, I realized it wasn’t about restriction; it was about freedom.

I started with a simple spreadsheet that tracked my income and expenses. I categorized everything: rent, food, transportation, bills, and entertainment. Then I set spending limits based on what I could actually afford.

The key was honesty. I stopped pretending I’d spend “just $50” eating out when it was always closer to $200.

By being real with myself, I was able to find places to cut back — without feeling deprived.

Tip: A clear, honest monthly budget helps you prioritize essentials, eliminate waste, and speed up your debt payoff plan.

Step 4: Build a Small Emergency Fund

This one felt counterintuitive. I thought, “Why save money when I have so much debt?” But skipping this step cost me dearly in the past.

Whenever something unexpected happened — a car repair, medical bill, or appliance breakdown — I had to pull out my credit card. That cycle kept me in debt.

So this time, I built a small emergency fund first — just $1,000. It wasn’t much, but it gave me breathing room. When life threw me a curveball, I was ready.

That small cushion protected my debt-free progress and gave me peace of mind.

Tip: Before attacking your debt, save a small emergency fund (even $500–$1,000) to prevent future setbacks.

Step 5: Choose a Debt Payoff Strategy

Once I had my budget and savings in place, it was time to attack the debt. But how?

I researched two popular methods:

Debt Snowball: Pay off the smallest balance first for motivation.
Debt Avalanche: Pay off the highest-interest debt first to save money.

I chose the snowball method because I needed emotional wins. Paying off one small debt quickly gave me momentum. After that, I rolled the payment from that debt into the next one — like a snowball getting bigger with each victory.

Seeing progress felt addictive. Every time I crossed out a balance, my motivation grew.

Tip: The debt snowball method is great for momentum; the debt avalanche method is best for saving on interest. Choose the one that fits your personality.

Step 6: Track Every Dollar You Spend

This was a game-changer. Once I started tracking every purchase, I realized how many “little things” were draining my money.

Coffee here. Takeout there. Subscriptions I forgot about. It all added up.

I started using a free budgeting app that synced with my bank account. Each week, I reviewed where my money went. At first, it was painful — but it quickly became empowering.

Knowing exactly where my money went helped me align my spending with my goals. I no longer asked, “Where did my paycheck go?” I knew.

Tip: Consistently tracking your expenses helps you identify hidden spending leaks that slow down your debt payoff progress.

Step 7: Cut the Non-Essentials (Without Hating Your Life)

At one point, I tried to cut everything — no coffee, no takeout, no Netflix. But after a few weeks, I was miserable. I learned that being too strict leads to burnout.

So I took a balanced approach. I kept small things that made me happy but found cheaper ways to enjoy them. I brewed coffee at home, hosted movie nights instead of going out, and swapped gym memberships for YouTube workouts.

The trick wasn’t deprivation — it was intentional spending.

Tip: Cut unnecessary spending, but leave room for joy. Sustainable changes lead to long-term financial freedom.

Step 8: Increase Your Income

After trimming expenses, I looked for ways to earn more. Cutting costs only goes so far — boosting income accelerates progress.

I started freelancing on weekends and took on small side gigs online. I sold old clothes and electronics I didn’t use. Every extra dollar went straight to debt.

Over time, those small boosts added up. I even asked for a raise at work — and got it.

That extra income shaved months off my payoff timeline.

Tip: Side hustles and small income streams can dramatically speed up your debt repayment journey.

Step 9: Negotiate and Consolidate Where You Can

Here’s something I didn’t know early on: many lenders are willing to work with you if you ask.

I called my credit card company and asked for a lower interest rate. To my surprise, they said yes — reducing it from 21% to 15%. I also refinanced my car loan for a lower payment.

Later, I consolidated two high-interest credit cards into one lower-interest personal loan. That move saved me hundreds in interest.

Tip: Don’t be afraid to negotiate interest rates or consolidate debt. Lowering interest can help you pay off debt faster and with less stress.

Step 10: Surround Yourself with Support

Trying to pay off debt in silence is hard. I used to keep it secret out of embarrassment. But once I started talking about it with friends and family, I realized I wasn’t alone.

I even joined online communities focused on personal finance. Reading other people’s debt-free stories kept me inspired.

Having support made all the difference. I found encouragement on hard days and celebrated victories with people who understood.

Tip: Join debt-free communities online or locally for motivation, accountability, and encouragement.

Step 11: Celebrate the Small Wins

I’ll never forget the day I paid off my first credit card. It was only a $600 balance, but it felt like I’d conquered a mountain.

I treated myself to a small victory — not by spending, but by celebrating intentionally. I cooked a nice dinner and reflected on how far I’d come.

Every milestone — no matter how small — deserves recognition. It reminds you that progress is happening, even when the road feels long.

Tip: Reward yourself with non-financial celebrations to stay motivated throughout your debt-free journey.

Step 12: Stay Debt-Free (and Build the Future You Deserve)

When I finally made my last payment, I felt an incredible mix of relief and pride. But the work wasn’t over.

The habits that got me debt-free needed to continue if I wanted to stay that way. I built a new financial system focused on saving, investing, and planning.

I created sinking funds for upcoming expenses, set up automatic transfers to savings, and learned about investing for long-term goals.

Now, instead of paying interest, I earn it. And that feeling — knowing my money is working for me — is priceless.

Tip: Once you’re debt-free, maintain your habits, save regularly, and invest for your future. Financial freedom is a lifestyle, not a destination.

My Debt-Free Moment: What It Really Felt Like

When I clicked “submit payment” on my final loan, I expected fireworks. But instead, I felt calm — a quiet kind of joy.

For years, I carried the weight of debt like an invisible burden. Every decision, every plan for the future, came with an asterisk: if I can afford it.

Now, that weight is gone. I can dream again. I can save for a home, travel without guilt, and give generously.

Most importantly, I can sleep at night knowing my money is truly mine.

Conclusion

If you’re in debt right now, I know how it feels — the anxiety, the shame, the constant pressure. But please hear this: you can get out of debt.

You don’t need to be a financial expert. You don’t need a six-figure income. You just need a plan, patience, and persistence.

Start small. Face your numbers. Build your budget. Save a little. Pay one debt at a time. Celebrate along the way.

Getting out of debt isn’t just about money — it’s about freedom, confidence, and peace of mind.

And if someone like me — who once thought debt was a life sentence — can do it, so can you.

Your debt-free life is waiting. Take the first step today.

12 Steps to Get Out of Debt